UPDATE: VW's Audi Brand To Expand Into Motorcycle Business With Ducati Takeover

Volkswagen AG's (VLKAY, VOW.XE) Audi premium-car brand on Wednesday confirmed the acquisition of Italian motorcycle maker Ducati Motor Holding SpA from investment firm Investindustrial Group, but didn't disclose financial details.

Ducati "has great expertise in high-performance engines and lightweight construction, and is one of the world's most profitable motorcycle manufacturers," Audi Chief Executive Rupert Stadler said in a statement after the supervisory boards of Audi and VW approved the deal.

Audi said the deal "will be completed as quickly as possible" once regulatory approval has been received.

"We are convinced that the company, in Audi's capable hands, will continue an extremely positive future," Investindustrial Chairman Andrea Bonomi said in a statement. He said he was confident that Audi will continue to expand the brand world-wide, adding that Ducati's minority shareholders BS Private Equity and Hospitals of Ontario Pension Plan agreed to sell their stakes as well. Ducati will thus become a wholly owned Audi subsidiary.

People familiar with the matter told Dow Jones Newswires earlier this week that the price for Ducati is around EUR850 million including debt.

Ducati reported net profit of EUR32.5 million in 2011 on revenue of EUR478.5 million as it sold around 42,000 vehicles, according to figures provided by the motorcycle maker. Earnings before interest, taxes, depreciation and amortization, or Ebitda, were EUR87.5 million. The Bologna-based firm employs around 1,100 people.

The company was founded by Adriano and Marcello Ducati in 1926. Known originally as Societa Scientifica Radiobrevetti Ducati, it initially built parts for radios. It started producing motorcycles in 1949.

Volkswagen wants to become the world's largest auto maker by 2018 and is investing heavily to boost its presence across the globe. It posted record vehicle sales and profits last year and has significant muscle to finance its expansion plan with EUR17 billion in net liquidity as of Dec. 31, 2011.

The Wolfsburg-based auto maker took over truck makers Scania AB and MAN SE in recent years to increase its footprint in commercial vehicles and will now enter the high-performance motorcycle business through the Ducati acquisition.

The move into trucks and motorcycles is widely seen as the brainchild of VW's influential supervisory board Chairman and former Chief Executive, Ferdinand Piech, who has voiced admiration for Ducati in the past and reportedly owns one of its motor bikes.

The rapid expansion, however, has sparked concerns about the growing industrial complexity Volkswagen's management has to master at a time when competition for its car business is heating up amid a fragile economic environment.

-By Christoph Rauwald, Dow Jones Newswires; [phone]; [e-mail]

--Gilles Castonguay in Milan contributed to this article.